Author Archives: Admin

Keeping an Eye on Cash Flow

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Steven Becerra, director, Albuquerque South Valley Small Business Development Center

Steven Becerra for the NMSBDC

Cash is the most liquid of a business’s assets. Although cash isn’t obvious in a high-tech world where money mostly moves by debit and credit cards, wire transfers and other electronic transactions, the monetary standard of all these types of transactions is cash. Quiet as it’s kept, cash still rules the economy. It’s the easiest form of money that can be used to buy things, pay off debts or distribute capital.

Given that, business owners should have a basic understanding of cash flow and know how to ensure their businesses have sufficient cash to sustain current operations and ultimately create wealth for the owners and investors. And yet this most basic of business cycles is probably the most misunderstood — and sometimes woefully ignored — by business owners, who are vigilant about checking their account balances at the bank but fail to predict how much cash they have available at any given time to meet the needs of the business.

ABCs of cash flow:

The injection of cash — or sources of cash — come from four areas: investment, debt, sale of assets, and operating profits.

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A Resource Center for New Mexico Businesses

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Paul F. Goblet, financial advisor to the New Mexico Small Business Investment Corporation

Paul F. Goblet, financial advisor to the New Mexico Small Business Investment Corporation

The New Mexico Small Business Investment Corporation and its partners launched Finance New Mexico two years ago as a one-stop resource center for New Mexico entrepreneurs. An outgrowth of Lt. Gov. Diane Denish’s statewide small business tours, Finance New Mexico was intended to be a source of information and support to small business owners in need of information about how to start or build a business and where to find money to finance such a venture. Its overarching goal was to nurture the economy of New Mexico by promoting job creation and economic development, especially in the state’s rural areas.

The power of information:

Finance New Mexico was based on the belief that knowledge could empower the state’s would-be entrepreneurs. To that end, a Web site was created from which information could be disseminated through timely articles about the resources available to small-business owners.

The articles, written by experts from the financial services industry, are also distributed to the media for publication in community newspapers around the state, where most business people get their news. Past articles have covered such topics as how to start a business, surviving in a slow economy, obtaining a loan and how to attract equity investors.

As the initiative enters its third year, Finance New Mexico is coming up with ways that business people can interact online with authors of these articles through social networking and a comments board at the end of each article. Finance New Mexico is now on FaceBook and LinkedIn. Twitter tweets are sent when new articles are posted to the Web site and authors participate in discussions on LinkedIn.

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Artist Hits Homer With Help of Economic Development Network

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Monica Abeita, Regional Development Corporation for Northern New Mexico Connect

Monica Abeita, Regional Development Corporation for Northern New Mexico Connect

Jolene Jessie’s life philosophy, and the mantra that has made her successful in business, is “find a need and meet it.” In 1987, Jessie worked as a free-lance portrait artist in San Francisco and was asked to paint images of San Francisco Giants players on baseballs. “The Giants were my first clients,” she said. “They bought dozens of those baseballs.”

That’s where Jessie’s work in custom sports memorabilia began. Today, Jessie operates sportartist.com from her home in Chama, New Mexico. Her custom portraits are painted on jerseys, baseballs, bats, footballs and other collectibles. Jessie also has a successful business relationship with Upper Deck, the world’s largest baseball card company, for whom she produces high-end signed memorabilia.

As a member of the Chama Valley Chamber of Commerce, Jessie in 2008 met Christopher Madrid of LINK, which offers coaching and networking to small businesses and entrepreneurs in Rio Arriba County. It is one of five services offered to Northern New Mexico businesses provided by Northern New Mexico Connect, the principal economic-development and investment arm of Los Alamos National Security LLC and Los Alamos National Laboratory (LANL).

“Christopher and I began by brainstorming about my business, including potential growth, employees, legal structure, future partners, and other ideas,” Jessie said. “He then began networking me with resources based on my business needs.”

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The Pros and Cons of a Ready-Made Business

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Buying a franchise or becoming a multilevel marketing salesperson allows an entrepreneur to start a business without starting from scratch. Both provide opportunities to run a business using methods developed and used by a parent organization.

More than 35 percent of all businesses in the United States are franchises, including McDonald’s, Subway, Ace Hardware, various motel chains and auto dealerships.

Multilevel marketing companies such as Amway, Avon, Mary Kay and Shaklee Corp. use independent salespeople working on commission to get their products to consumers.

Not for everyone

The most obvious advantage of owning a franchise or being an independent product or service representative is that both setups offer instant name recognition and credibility and products that are familiar to consumers.

A person who opens a franchise — a franchisee — benefits from national or regional advertising and marketing done by the parent company. He or she is trained by the franchisor and given a manual that outlines company standards and operations. Multilevel marketing salespeople get similar resources and support materials.

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Enterprise Center Nurtures New Businesses

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Director, San Juan College Enterprise Center

Jasper Welch, Director, San Juan College Enterprise Center

Just as some newborns need extra care before they’re ready to go home, some businesses need to be incubated before they’re ready for a grand opening. Farmington, N.M., is home to one of the state’s seven business incubators: the San Juan College Quality Center for Business. The Quality Business Center offers all the training wheels an entrepreneur could hope for under one roof — an integrated set of business support and development programs such as staff or management training and planning, technical assistance and even a loan fund that provides gap financing for startup and growing companies in northwestern New Mexico.

The hub of the college’s business-building effort is the Enterprise Center, a mixed-use incubator that offers office and production space for up to 20 startup and emerging companies at one time. The list of tenants is always changing as some businesses “graduate” from the program and new ventures take root.

The multi-program facility is the only one of New Mexico’s business incubators to be organized as a one-stop resource center for entrepreneurs. (The state’s other incubators are the Santa Fe Business Incubator, NMSU Arrowhead Business Incubator, Los Alamos Small Business Center, Clovis Business Incubator and South Valley and WESST Corp business incubators in the Albuquerque area.)

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Venture Acceleration Fund Wants to Hear From Entrepreneurs

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Monica Abeita, Regional Development Corporation for Northern New Mexico Connect

Monica Abeita, Regional Development Corporation for Northern New Mexico Connect

On Sept. 21, 2009, Los Alamos National Security, the public-private partnership that runs Los Alamos National Laboratory, launches the year’s second Venture Acceleration Fund call for ideas. The fund invests up to $100,000 in Northern New Mexico businesses that have links with LANL technology or expertise and want to apply that technology to a commercial product for which there is — or could be — market demand. The ultimate goal is to create an entrepreneurial culture in Northern New Mexico.

Recipients of Venture Acceleration Fund awards typically spend the money on proof of concept, prototyping, product engineering, customer acquisition and market validation. The awards help entrepreneurs reach critical intermediate milestones that make the venture more attractive and less risky to later-stage investors.

Success stories

As a result of the fund’s call for ideas in June, four companies received approximately $100,000 each. One award-winner was Adaptive Radio Technologies, which will construct and test a radio communications system prototype it calls “Firehose” for use on miniature satellites or “CubeSats.” Firehose will apply an algorithm developed at LANL that enables advanced functions such as imaging and video streaming. Currently, CubeSat communication systems have data rates comparable to dial-up modems, but the Firehose will offer 10 times more bandwidth, averaging 1.7 megabits per second.  This novel system can also be used in small, advanced rovers and unattended airborne vehicles, also known as drones. If the technology is successful, Adaptive Radio Technologies plans to establish an aerospace company in Northern New Mexico.
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Getting Top Grades in Financial Literacy

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Gena Wilimitis of the Securities Division of the NM Regulation & Licensing Dept.

Gena Wilimitis of the Securities Division of the NM Regulation & Licensing Dept.

The steep rise in credit card debt, short-term lending and personal bankruptcies underscore the need for more effective economic education if individuals are to be empowered to achieve financial security.  Without basic knowledge of how financial markets, credit, and investing work, individuals risk becoming victims of fraud and of making unsound investments.

A variety of financial education materials are available to educators, but it’s not always easy to get them in the right hands. The New Mexico Coalition for Financial Education is trying to change that.

Coordinating financial education efforts

The New Mexico Coalition for Financial Education is a voluntary association of educator businesses, government agencies and individuals who believe that the prosperity of our state requires economic and financial education. The coalition’s goal is to help all New Mexicans acquire the knowledge, skills, confidence and resources that can help them manage and improve their personal financial lives. The coalition formed more than four years ago to act as an umbrella group for all the financial literacy efforts under way statewide. What began as a loose network of individuals and organizations has developed into a formal organization with a board of directors and monthly board meetings. The coalition recently applied for nonprofit status.

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Putting Business to the SWOT Test

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Betsy Gillette, Director of Market Research and Planning, Technology Ventures Corporation

Betsy Gillette, Director of Market Research and Planning, Technology Ventures Corporation

Market research is an essential part of a business plan and savvy entrepreneurs will subject research data to a SWOT analysis. SWOT is an acronym for strengths, weaknesses, opportunities and threats; a SWOT analysis can help determine where a product or company stands and be a foundation for strategic planning.

Start with strengths and weaknesses

An entrepreneur first should review the market research data and note the most salient information about the market, product category, competition, technology and potential customers. He or she then should assess strengths and weaknesses — the internal qualities that differentiate the company or its product. A startup technology company’s strengths, for example, might include its patents, technical team, innovative product or compact size. Patents can keep competitors at bay long enough for a technical team to launch a product — but that’s a strength only if the product fulfills customer needs.

Many of the same attributes can be weaknesses — places where the product or company falls short of the market’s top performers.  Potential weaknesses include the management team, manufacturing costs and lack of clout or name recognition. Even the patent can be a weakness if the company only has domestic patents for products it hopes to sell overseas: Without an international patent, the technology has no protection from global competitors. (And once a domestic patent is published, competitors know what a company is doing and can figure out how to get around a patent.)

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Search Engine Optimization: Strong Strategy for a Weak Economy

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By Nina Anthony, SEO Consultant for WESST

As companies search for the most efficient ways to spend limited marketing resources in a weak economy, more and more are spending those dollars online. According to the Interactive Advertising Bureau, the third quarter of 2008 showed the second-highest growth period for Internet marketing revenues in the bureau’s history. IAB predicts total online ad spending of nearly $26 billion this year, and ZenithOptimedia likewise predicts that global Internet ad spending will surge by 28 percent in 2009.

Smart companies are turning to inbound marketing strategies: the kind where customers find the companies that are visible where they orbit, in cyberspace. Continue reading →

Cultural Awareness Key to International Business Success

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Jerry Pacheco, Executive Director, International Business Accelerator

Jerry Pacheco, Executive Director, International Business Accelerator

New Mexicans are familiar with the stereotype about Mexican Americans and Hispanics — that people who have lived here for generations have the same tastes and preferences as recent arrivals from Mexico. But many of us are just as guilty of viewing Central and Latin American cultures as a homogeneous “Hispanic” mass, thus negating the rich diversity found in the customs and traditions of South and Central America.

Such generalizations are lethal to those of us who do business across national borders. The culturally insensitive businessperson risks offending the very people he wants to please and overlooks opportunities to market to various subgroups.

One size doesn’t fit all.

The simple tortilla illustrates how different traditions can be within a larger cultural group.

On my first visit to Mexico, I was surprised to be served a small corn tortilla rather than a large flour tortilla like those found in Northern New Mexico. My hosts stared when I tore the tortilla in half and put the remainder back in the tortilla container. When a member of this family later visited me in Northern New Mexico, it was my turn to be surprised when he grabbed a whole tortilla and put it on his plate.

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